MRO Magazine

Unemployment rate at 6% in July — lowest since 1974

Ottawa, ON -- Canadian employment was little changed in July, reports Statistics Canada in its latest Labour Force ...


Human Resources

August 13, 2007
By MRO Magazine
MRO Magazine

Ottawa, ON — Canadian employment was little changed in July, reports Statistics Canada in its latest Labour Force Survey, leaving growth so far in 2007 at 1.3%, similar to the growth rate in the first seven months of 2006. The unemployment rate edged down 0.1 percentage points to 6.0%, the lowest since 1974.

Alberta was the only province to show a significant employment increase in July, as an estimated 14,000 more people were working. This pushed Alberta’s employment rate back to its record high of 71.6%.

In July, employment gains in professional, scientific and technical services; manufacturing; transportation and warehousing; and utilities offset declines in educational services and finance, insurance, real estate and leasing.

Employment growth continued to be vigorous for students aged 15 to 24, notably for those aged 15 to 19. In July, the employment rate among 15 to 19 year-olds approached the high levels last observed in the early 1990s.

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CANADIAN LABOUR MARKET REMAINS STRONG

Employment growth so far in 2007 has been stronger in Canada than in the United States. Once concepts are adjusted for comparability to U.S. definitions, Canada’s employment rate in July was 64.1%, 0.3 percentage points higher than at the beginning of 2007. The employment rate in the United States, however, declined during the same period by 0.4 percentage points to 63.0%. While Canada is reaching record high rates of employment, the U.S. is still far from the peak of 64.7% attained in April 2000.

Following slower wage increases in the first quarter of 2007, July marked the third consecutive month with a year-over-year increase above 3%. Canadian employees, on average, made 3.7% more per hour in July than they did a year earlier, running ahead of the most recent year-over-year increase of 2.2% in the Consumer Price Index.

The youth unemployment rate dropped to a low of 10.6% in July, a decline of 1.3 percentage points from a year earlier. This is their lowest unemployment rate since September 1989. Unemployment rates for youths have declined in each province in the past year with the exception of Ontario, where the rate remained unchanged from one year ago. So far in 2007, employment growth for youths (+2.1%) has been higher than that of both adult women (+1.5%) and adult men (+0.7%).

Employment gains have largely been in professional, scientific and technical services; information, culture and recreation; and trade so far in 2007. This is in contrast to the first seven months of 2006, when gains were mainly in health care and social assistance; finance, insurance, real estate and leasing; and “other services.” However, manufacturing employment declined by 72,000 during the first seven months of 2007, similar to the losses in this industry during the same period of 2006.

GOODS SECTOR GROWTH IN JULY

Employment in the goods-producing sector was up in July, mainly in manufacturing (+20,000) and utilities (+6,000). In the service sector, more workers were added in professional, scientific and technical services (+25,000) and transportation and warehousing (+17,000). Total gains, however, were offset by service sector declines in educational services (-57,000) and finance, insurance, real estate and leasing (-13,000).

The large drop in educational services in July was spread across several provinces and was concentrated among teachers and educational assistants in primary and secondary schools. July’s decline in education employment follows a two-year upward trend in this industry.

Declines in the public sector (-20,000) partially offset gains among private sector employees (+35,000) in July. In the past 12 months, employment growth has been strongest among the self-employed (+7.8%), followed by private sector employees (+1.3%), while public sector growth was weakest (+0.5%).

ALBERTA CONTINUES TO FLOURISH

Alberta’s estimated employment increase of 14,000 in July contributed to total gains of 61,000 (+ 3.2%) so far in 2007, similar to the growth rate over the same period in 2006. Gains in July were in full-time work, and mainly in health care and social assistance and trade. In the first seven months of 2007, trade; construction; health care and social assistance; and information, culture and recreation garnered the bulk of the increases.

Although Ontario’s overall employment level was little changed in July, there were a few notable industry movements. Manufacturing employment was up an estimated 27,000 in July, the first significant increase in more than a year, with gains spread across several manufacturing industries. There were also gains in professional, scientific and technical services, while employment declined in educational services.

Quebec’s employment picture in July was essentially unchanged, leaving total gains since December 2006 at 69,000 (+1.8%). For the second consecutive month in July, the rate of unemployment (6.9%) was at its 33-year low, while the employment rate (61.1%) remained at its record high.

In New Brunswick, despite an employment decline of 3,000 in July, growth has been steady since September 2006, up 3.6% or 13,000. Gains since September have predominantly been in construction; health care and social assistance; and information, culture and recreation.

Employment in Nova Scotia declined by an estimated 3,000 in July, continuing the weakness observed since May 2007. This is a reversal of the strength shown earlier, as employment grew 2.5% from September 2006 to April 2007.

LABOUR MARKET FOR STUDENTS HEATS UP IN JULY

From May to August, the Labour Force Survey (LFS) collects labour market information about young people aged 15 to 24 who were attending school full time in March and who intend to return to school in the fall. The published estimates are not seasonally adjusted, therefore, comparisons can only be made on a year-over-year basis.

The summer months continued to sizzle for students aged 15 to 24. Their July employment rates were similar to the high levels last attained in the months of July in the early 1990s, especially for 15 to 16 year-olds (40.2%) and 17 to 19 year-olds (69.2%). Employment rates for students aged 20 to 24 (75.3%) remained on par with levels observed in the summer of 2006. Prince Edward Island (79.0%) and Manitoba (70.9%) had the highest proportion of students aged 15 to 24 working this July.